Opinion
C21-1580-MLP
02-06-2023
SANDHU FARM INC., et al., Plaintiffs, v. FERROSAFE LLC, et al., Defendants.
ORDER
MICHELLE L. PETERSON UNITED STATES MAGISTRATE JUDGE
On November 23, 2021, Defendant Ferrosafe LLC (“Ferrosafe”) removed this action from Skagit County Superior Court on the grounds that this Court had diversity jurisdiction. (Dkt. # 1 at 2.)
Federal courts “have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). On January 25, 2023, pursuant to Federal Rule of Civil Procedure 7.1, the Court ordered Ferrosafe to file a disclosure statement providing the name and citizenship of every individual or entity whose citizenship is attributed to Ferrosafe. (Dkt. # 45.) The Court explained that an unincorporated entity, such as an LLC or partnership, “‘is a citizen of every state of which its owners/members are citizens,' not the state in which it was formed or does business.” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 612 (9th Cir. 2016) (quoting Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006)). “[I]f an LLC's membership includes other unincorporated associations, like partnerships or additional LLCs, a plaintiff must ‘trace[ ] through however many layers of partners or members there may be' until the underlying party's citizenship is established.” Asana Partners Fund II Reit 14 LLC v. Heath Fam. I LLC, 2020 WL 7241449, at *2 (W.D. Wash. Dec. 9, 2020) (quoting Meyerson v. Harrah's E. Chi. Casino, 299 F.3d 616, 617 (7th Cir. 2002)).
In its response to the Court's Order, Ferrosafe indicated somewhat vaguely that, at some point in the past, its sole member was Ferrosafe Holdings, LLC, whose members were Oak Bowery, LLC, and JH Graceson, LLC. (Dkt. # 46 at 1-2.) However, Ferrosafe failed to provide the names and citizenship of the members of Oak Bowery, LLC, and JH Graceson, LLC. These entities' citizenship is attributed to Ferrosafe. See Asana Partners, 2020 WL 7241449, at *2.
Ferrosafe also stated that, beginning November 24, 2021-the day after it removed the case to this Court-its sole member is Auxo Rail Services, LLC, whole sole member is Auxo Rail Holdings, LLC, whose members in turn are Auxo Growth Holdings I - Rail, LLC, and Greycliff Partners LP. (Dkt. # 46 at 2.) Ferrosafe failed to provide the names and citizenship of the members of Auxo Growth Holdings I - Rail, LLC, and Greycliff Partners LP. Again, the citizenship of these entities is attributed to Ferrosafe.
Ferrosafe's insufficient disclosures violated Federal Rule of Civil Procedure 7.1, as well as this Court's Order.
An attorney or party who without just cause fails to comply with any of the Federal Rules of Civil or Criminal Procedure, these rules, or an order of the court, . . . may, in addition to or in lieu of the sanctions and penalties provided elsewhere in these rules, be required by the court to satisfy personally such excess costs and may be subject to such other sanctions as the court may deem appropriate.W.D. Wash. Local Civil R. 11(c).
Accordingly, the Court ORDERS Ferrosafe to show cause by February 14, 2023, why it should not be sanctioned for failure to comply with Federal Rule of Civil Procedure 7.1 and this Court's Order.